Case 1:09-cr-00208-EGS Document 3 Filed 08/21/09 Page 1 of 38
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
Holding a Criminal Term
Grand Jury Sworn in on December May 2, 2008
UNITED STATES OF AMERICA
v.
MUSTAFA ABDUL ALJAFF,
a.k.a. MITCH MOUSA,
MARWAH FELAHY
a.k.a. MARWAH ALJAFF,
and NEIL FELAHY,
Defendants.
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CRIMINAL NO.
GRAND JURY ORIGINAL
UNDER SEAL
VIOLATIONS:
18 U.S.C. § 371 (Conspiracy);
18 U.S.C. § 2320 (Trafficking in
Counterfeit Goods or Services);
18 U.S.C. § 1341 (Mail Fraud);
18 U.S.C. § 2 (Aiding and Abetting;
Causing an Act to be Done)
INDICTMENT
The Grand Jury charges that:
COUNT ONE - CONSPIRACY
INTRODUCTION
At all times material to this Indictment:
Integrated Circuits
1.
An integrated circuit also referred to as “IC”, “chip” or “component” is a form of
semiconductor. It is an electronic circuit consisting of components and connectors contained on a
semiconductor chip. Usually packaged in a plastic or ceramic case, an integrated circuit is a
sophisticated, highly miniaturized, solid-state circuit in which all the elements of the circuit are
integrated together on a single semiconductor substrate. Integrated circuits contain tiny resistors,
Case 1:09-cr-00208-EGS Document 3 Filed 08/21/09 Page 2 of 38
capacitors and transistors on each chip and function as amplifiers, oscillators, timers, counters,
computer memory or microprocessors. Integrated circuits form the basis of all modern electronic
products. Integrated circuits are used in a variety of applications including consumer electronics,
transportation, medical, aircraft, spacecraft, and military. Counterfeit integrated circuits can result
in product malfunctions or product failures and can also cause serious bodily injury including
electrical shock, electrocution, and/or death. Counterfeit integrated circuits can also cause significant
property damage.
2.
Failure of an integrated circuit can result in one of two conditions called “open”
circuit” or “short circuit.” “Open circuit” means that electrical current is not permitted to flow as
intended. A machine with an open circuit may fail to function or it may fail to turn the unit or its
features on. “Short circuit” means that electrical current is permitted to flow at times and in places
it is not intended to flow or should not flow. A machine with a short circuit left in the “off” position
may randomly turn back on or the power switch may fail to turn the unit off.
3.
Markings on integrated circuits that indicate that the part is “military grade” signify
that the part has been specially manufactured, among other things, to withstand extreme temperature
ranges and high rates of vibration. Legitimate manufacturers subject such parts to specialized testing
not used in the production of “commercial grade” parts. Military grade integrated circuits are sold
to the U.S. military at a price higher than commercial grade, because of the special manufacture and
additional testing required. Such parts have special markings that identify them as military grade.
Some commercial grade parts have military applications.
4.
A “critical application item,” is a part that is critical to the safe operation, equipment
effectiveness or mission performance of a military system.
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Trademarks
5.
A “trademark” is a word, phrase (such as a logo), symbol or design (such as an icon),
or a combination thereof, which identifies and distinguishes the source of the goods of one particular
manufacturer from those of other manufacturers. A trademark is often a valuable asset, equated with
the “good-will” of a business organization, which can influence consumers in purchasing decisions.
A “word mark” and a “mark drawing” are types of trademarks.
6.
A trademark serves a variety of purposes. First, it avoids product confusion by
allowing consumers to have confidence that two products for sale bearing the identical trademark
were manufactured by the same company and will be of the same quality. Second, it permits
consumers to make an informed choice to purchase a name-brand good based upon past experience,
word-of-mouth, brand loyalty, and advertising impact. Third, it enables consumers who experience
a problem with the name-brand product they’ve purchased to seek recourse through the actual
manufacturer by returning the goods to the seller or seeking warranty or other recourse through the
original equipment manufacturer (“OEM”). Fourth, it allows the trademark owner to distinguish and
protect its products by giving that company exclusive rights as the trademark owner. This permits
the legitimate trademark owner to recoup investments of time, money, labor, and creativity and to
profit from its endeavors in bringing a particular product to market.
7.
When a counterfeit mark is used in the trafficking of goods and the mark is identical
or substantially indistinguishable from the mark registered on the principal register of the U.S. Patent
and Trademark Office, such a counterfeit mark is likely to cause confusion, mistake, and deception
with consumers.
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Government Contracting
8.
A “CAGE (Commercial and Government Entity) Code” is a unique, 5-digit alpha-
numeric sequence that identifies companies doing or wanting to do business with the federal
government. CAGE codes are used to support a variety of governmental functions, including
providing a standardized method of identifying a specific facility at a given location, for pay
processes, and for sources of supply. All CAGE codes are assigned and maintained by the Defense
Logistics Information Service (DLIS), Battle Creek, Michigan.
9.
The Defense Contract Management Agency (DCMA) is the Department of Defense
component that works with Defense suppliers to ensure that DOD supplies and services are delivered
on time, at the projected cost, and that they meet all performance requirements. When specified in
a contract, DCMA performs quality assurance inspections and accepts products, on behalf of the
Department of Defense. When this inspection is performed at the place of manufacture, it is known
as “origin - ” or “source acceptance.” However, some Department of Defense contracts provide for
“destination acceptance” instead of origin acceptance. When a contract provides for destination
acceptance, the contractor ships the parts to the destination set forth in the contract. The organization
that receives the parts is responsible for acceptance of the parts.
10.
Department of Defense contracts may require the contractor to provide a “Certificate
of Conformance.” This certificate is a written document, completed by the contractor, which certifies,
among other things, that the parts being provided conform to the contract requirements.
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The Defendants and Their Companies
11.
DCMA administered certain contracts with companies owned and operated by the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and others
known and unknown.
12.
The defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL
FELAHY, and others known and unknown, have engaged in the interstate trafficking of counterfeit
goods, that is integrated circuits bearing counterfeit marks, in a variety of ways. They acquired
integrated circuits bearing counterfeit marks from sources of supply within The People’s Republic
of China (“China”), imported them into the United States, and sold them to the public via the Internet.
They also obtained trademark-branded integrated circuits from sources currently unknown, scraped,
sanded or grinded off the original markings, painted the devices in a process referred to as “black
topping,” and remarked the devices with that or another trademark thereby fraudulently indicating,
among other things, that the devices are of a certain brand, newer, higher quality, faster or are military
grade.
13.
Since on or about July 18, 2002, and continuously thereafter, defendant MARWAH
FELAHY owns and operates BeBe Starr Consulting, Inc., serving as the Chief Executive Officer
(“CEO”), Secretary, and Chief Financial Officer (“CFO”). The stated type of business for this
company is “consulting services.” The street address of the principal executive office and principal
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business office is 176 Sidney Bay Drive, Newport Coast, California 92657.
14.
Since on or about January 2, 2004, and continuously thereafter, defendant MUSTAFA
ABDUL ALJAFF owns and operates Red Hat Distributors, Inc. (also known as “RH Distributors,”
and “Red Hot Distributors,”) serving as the CEO, Secretary, and CFO. The stated type of business
for this company is “consulting services.” The street address of the principal executive office and
principal business office and the mailing address is 27 Stone Pine Drive, Newport Coast, California
92657. Since on or about November 3, 2005, and continuously thereafter, Marwah Felahy became
the Secretary, the type of business for this company was changed to “interior design,” and the address
for the principal executive office and principal business office was changed to 10 Tideline Bluff
Drive, Newport Coast, California 92657. In or about February 2006, a business bank account was
opened for Red Hat Distributors, Inc. From inception of the account and continuously thereafter, the
defendants MUSTAFA ABDUL ALJAFF and MARWAH FELAHY were the authorized
signatories on the bank account. In or about July 2007, defendant NEIL FELAHY was added as a
signatory to the bank account and he was removed in or about January 2009.
15.
Since on or about January 14, 2005, and continuously thereafter, defendants
MUSTAFA ABDUL ALJAFF and MARWAH FELAHY (then known as “Marwah Aljaff”) own
and operate Force-One Electronics, Inc. From the time of incorporation, defendant MARWAH
FELAHY served as CEO and defendant MUSTAFA ABDUL ALJAFF served as Secretary and
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CFO. On or about November 8, 2005, and continuously thereafter, defendant MUSTAFA ABDUL
ALJAFF became the CEO and defendant MARWAH FELAHY became the Secretary. The stated
type of business for this company was originally “sales of electronic parts.” On or about November
8, 2005, the stated type of business was changed to “domestic stock.” Originally the address for the
principal executive office and principal business office was 176 Sidney Bay Drive, Newport Coast,
California 92657. On or about November 8, 2005, both addresses were changed to 10 Tideline Bluff
Drive, Newport Coast, California 92657. In or about February 2006, a business bank account was
opened for Force-One Electronics, Inc. From inception of the account and continuously thereafter,
defendants MUSTAFA ABDUL ALJAFF and MARWAH FELAHY were the authorized
signatories on the bank account. In or about October 2007, defendant NEIL FELAHY was added
as a signatory to the bank account and he was removed in or about January 2009.
16.
Since on or about June 14, 2006, and continuously thereafter, defendant MUSTAFA
ABDUL ALJAFF owns and operates MVP Micro, Inc. From the time of incorporation, defendant
MUSTAFA ABDUL ALJAFF served as CEO, Secretary, and CFO. The stated type of business for
this company is “electronics consulting service.” Originally the address for the principal executive
office and principal business office was 3100 North Bristol, Suite 450, Costa Mesa, California 92626.
In or about July 2006, a business bank account was opened for MVP Micro, Inc. From inception of
the account and continuously thereafter, defendant MUSTAFA ABDUL ALJAFF was the authorized
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signatory on the bank account. In or about July, 2007, defendant MARWAH FELAHY was added
as a signatory to the bank account. In or about October 2007, defendant NEIL FELAHY was added
as a signatory to the bank account and he was removed in or about January 2009. Since on or about
April 26, 2007, and on information and belief, continuously thereafter, defendant NEIL FELAHY
has served as the manager of MVP Micro, Inc.
17.
Since on or about July 7, 2006, and continuously thereafter, defendant MUSTAFA
ABDUL ALJAFF owns and operates Labra, Inc. From the time of incorporation, defendant
MUSTAFA ABDUL ALJAFF served as CEO, Secretary, and CFO. The stated type of business for
this company is “electronics consultant.” The address for the principal executive office and principal
business office is 3100 North Bristol, Suite 450, Costa Mesa, California 92626. On or about May 24,
2007, the name of the business was changed to Labra Electronics, Inc. On or about July 29, 2008,
the name of the business was changed to Becker Components, Inc. In or about August 2006, a
business bank account was opened for Labra, Inc. From inception of the account and continuously
thereafter, defendants MUSTAFA ABDUL ALJAFF and MARWAH
FELAHY were the
authorized signatories on the bank account. In or about October 2007, defendant NEIL FELAHY
was added as a signatory to the bank account and he was removed in or about January 2009.
18.
Since on or about September 2, 2008, and continuously thereafter, defendant
MARWAH FELAHY owns and operates Pentagon Components, Inc., serving as the CEO,
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Secretary, and CFO. The stated type of business for this company is “sale of electronic parts.” The
street address of the principal executive office and principal business office is 176 Sidney Bay Drive,
Newport Coast, California 92657. On or about April 27, 2009, the stated business purpose was
changed to “electronics distribution.”
19.
At all times relevant herein, defendant MARWAH FELAHY has received tens of
thousands of dollars in “consulting fees,” from MVP Micro, Inc., payable to BeBe Starr Consulting,
Inc. via checks and wire transfers.
20.
The defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL
FELAHY, and others known and unknown, utilized numerous business entities through which they
operated their integrated circuit counterfeiting business operations. Those business entities include:
MVP Micro, Inc.; Labra Inc., Labra Electronics, Inc., and Becker Components, Inc.; Red Hat
Distributors, Inc. (also used by the defendants as “RH Distributors, Inc.” and “Red Hot Distributors,”
Inc.); Force-One Electronics, Inc.; BeBe Star Consulting, Inc.; and Pentagon Components, Inc.
21.
At all times relevant herein, the defendants MUSTAFA ABDUL ALJAFF,
MARWAH FELAHY, and NEIL FELAHY, and others known and unknown, used the address of
17332 Von Karman Avenue, Suites numbered 110, 115, and 160, Irvine, California 92614 for the
importation, manufacture, advertisement, sales, and distribution of integrated circuits bearing
counterfeit marks.
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22.
At all times relevant herein, the defendants MUSTAFA ABDUL ALJAFF,
MARWAH FELAHY, and NEIL FELAHY, and others known and unknown, operated a number
of websites advertising numerous brand-name integrated circuits for sale. Those websites, available
to
anyone
accessing
the
Internet,
include
www.mvpmicro.com,
www.labrainc.com,
www.rhdistributors.com, and www.pentagoncomponents.com.
THE CONSPIRACY
23.
From on or about September 26, 2007 and continuing thereafter until at least on or
about August 21, 2009, and upon information and belief, continuing thereafter, within the District of
Columbia and elsewhere, the defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY,
and NEIL FELAHY, did unlawfully, knowingly, and willfully, conspire and agree together and with
each other, and with other persons both known and unknown:
A.
to commit offenses against the United States, that is, Trafficking in Counterfeit Goods
or Services, in violation of Title 18, United States Code, Section 2320(a); and Mail Fraud, in violation
of Title 18, United States Code, Section 1341; and
B.
to defraud the United States of America, and an agency thereof, that is the Department
of the Navy (herein after “United States Navy”), by selling to the United States Navy, integrated
circuits bearing counterfeit marks, which were in fact not what they were represented to be.
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GOAL OF THE CONSPIRACY
24.
It was a goal of the conspiracy that the defendants MUSTAFA ABDUL ALJAFF,
MARWAH FELAHY, and NEIL FELAHY, and others known and unknown, would enrich the
businesses through which they operated and would enrich themselves thereby deriving private and
commercial financial gain by importing, obtaining control of, making, selling, and distributing and
transporting in interstate and foreign commerce integrated circuits bearing counterfeit marks, one of
which was further falsely represented as being “military grade.”
MANNER AND MEANS
25.
In order to further the objects and goals of the conspiracy, the defendants MUSTAFA
ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and others known and unknown,
used the following manners and means, among others:
A.
Beginning on or about September 26, 2007, the defendants created an integrated circuit
counterfeiting operation at 17332 Von Karman Avenue, Irvine, California 92614.
B.
At all times relevant herein, the defendants created and maintained Internet websites
for
the
advertisement
www.mvpmicro.com,
of
name-brand
integrated
www.labrainc.com,
www.pentagoncomponents.com.
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circuits,
including
www.rhdistributors.com,
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C.
Beginning on or about September 26, 2007, the defendants acquired from sources in
China, integrated circuits bearing counterfeit marks and imported them into the United
States through various ports of entry.
D.
Beginning on or about September 26, 2007, the defendants thwarted detection at the
U.S. ports by Customs and Border Protection Officers of the integrated circuits
bearing counterfeit marks they were importing, by using various company names for
the importation, including the following: “MVP Micro, Inc.;” “Red Hat Distributors,”
“Red Hot Distributors,” and “RH Distributors.”
E.
Beginning on or about September 26, 2007, the defendants imported and had
integrated circuits bearing counterfeit marks destined for delivery to the addresses:
17332 Von Karman Avenue, Suite 110, Irvine, California 92614 and 17332 Von
Karman Avenue, [no suite number] Irvine, California 92614.
F.
On or about January 13, 2009, the defendants acquired and imported industrial
machinery to aid in creating and applying counterfeit markings to integrated circuits.
G.
On or about November 2008, the defendants acquired semi-conductor grade acetone,
which is a chemical used to remove markings, to clean, and to etch integrated circuits.
H.
At all times relevant herein, employees of the various companies owned and operated
by the defendants scraped, sanded and grinded-off the original markings, painted the
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devices in a process referred to as “black topping,” and remarked the devices with
counterfeit marks, thereby fraudulently indicating that the devices were a certain brand,
higher quality, newer, faster or military grade.
I.
At all times relevant herein, the defendants employed a sales staff to negotiate with
potential buyers, answer questions, and fulfill orders for sales of integrated circuits
from, among others, companies located within the United States and abroad and with
the U.S. Government.
J.
At all times relevant herein, the defendants created false “Certificates of
Conformance,” which purported that all materials shipped on the purchase order
conformed to the applicable military and/or commercial specifications. The
defendants further falsely claimed on the certificates that test reports or material
certifications for the materials being shipped were on file with them or with
their suppliers.
K.
At all times relevant herein, the defendants acquired “CAGE” codes in order to do
business with the Department of Defense.
L.
Beginning on or about March 3, 2009, June 26, 2009, and July 14, 2009, and other
dates known and unknown, the defendants entered into contracts with the United
States Department of Defense, that is, the United States Navy and other government
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agencies, for the sales of integrated circuits.
M.
At all times relevant herein, the defendants distributed integrated circuits bearing
counterfeit marks in interstate commerce.
N.
At all times relevant herein, the defendants received proceeds from the sales of
integrated circuits bearing counterfeit marks and deposited the monies into bank
accounts which they owned and controlled.
O.
At all times relevant herein, the defendants derived private and commercial financial
gain from their transactions involving integrated circuits bearing counterfeit marks.
P.
At all times relevant herein, the defendants enriched the companies through which
they operated and they enriched themselves with proceeds from the sales of integrated
circuits bearing counterfeit marks.
OVERT ACTS
26.
Within the District of Columbia, and elsewhere, in furtherance of the above-described
conspiracy and in order to carry out the objects thereof, the defendants MUSTAFA ABDUL
ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and others known and unknown, committed
the following overt acts, among others:
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Operation and Formation of Businesses
A.
On or about July 18, 2002, and continuing thereafter, defendant MARWAH FELAHY
owned and operated BeBe Starr Consulting, Inc.
B.
On or about January 2, 2004, and continuing thereafter, defendant MUSTAFA
ABDUL ALJAFF owned and operated Red Hat Distributors, Inc., also known as “Red
Hot Distributors” and “RH Distributors.”
C.
On or about January 14, 2005, and continuing thereafter, defendants MUSTAFA
ABDUL ALJAFF and MARWAH FELAHY (also known as “Marwah Aljaff”)
owned and operated Force-One Electronics, Inc.
D.
On or about June 14, 2006, and continuing thereafter, defendant MUSTAFA ABDUL
ALJAFF owned and operated MVP Micro, Inc.
E.
On or about July 7, 2006, and continuing thereafter, defendant MUSTAFA ABDUL
ALJAFF owned and operated Labra, Inc., which he subsequently renamed, “Labra
Electronics, Inc.,” and then renamed “Becker Components, Inc.”
F.
On or about September 2, 2006, and continuing thereafter, defendant MARWAH
FELAHY owned and operated Pentagon Components, Inc.
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Operation of the Websites
G.
At all times relevant herein, the defendant MUSTAFA ALJAFF and others known
and unknown, owned and operated a computer network server.
H.
At all times relevant herein, the defendants MUSTAFA ABDUL ALJAFF,
MARWAH FELAHY, and NEIL FELAHY, and others known and unknown,
operated a number of websites, including: www.mvpmicro.com, www.labrainc.com,
www.rhdistributors.com, and www.pentagoncomponents.com advertising brand-name
integrated circuits.
The Counterfeiting Operation
I.
At all times relevant herein, the defendants MUSTAFA ABDUL ALJAFF,
MARWAH FELAHY, and NEIL FELAHY, and others known and unknown,
conducted an integrated circuits counterfeiting operation located at 17332 Von Karman
Avenue, Irvine, California 92614.
Importation of Integrated Circuits Bearing Counterfeit Marks
J.
Between on or about September 26, 2007, and continuing until on or about March 25,
2009, the defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and
NEIL FELAHY, and others known and unknown, using various company names,
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imported from China on 22 separate occasions, approximately 13,073 integrated
circuits bearing counterfeit marks, including military-grade markings, valued at
approximately $140,835.50, including the following:
(1)
On or about September 26, 2007, MVP Micro, Inc., 17332 Von Karman Ave., Suite
110, Irvine, California 92614, imported 500 counterfeit “Fujitsu” integrated circuits,
valued at $2,500.00, from Shenzhen Guangdong, China.
(2)
On or about October 30, 2007, MVP Micro, Inc., 17332 Von Karman Ave., Suite
110, Irvine, California 92614, imported 1000 counterfeit “Analog Devices, Inc.,”
integrated circuits, valued at $6,330.00, from Shenzhen Guangdong, China.
(3)
On or about March 10, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 375 counterfeit “Fujitsu” integrated circuits, valued
at $1,125.00, from Shenzhen, China.
(4)
On or about June 18, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 814 counterfeit “Atmel” integrated circuits, valued
at $716.00, from Shenzhen, China.
(5)
On or about July 8, 2008, Red Hot Distributors, 17332 Von Karman Ave., Suite110,
Irvine, California 92614, imported 60 counterfeit “STMicroelectronics” integrated
circuits, valued at $110.00, from Shenzhen, China.
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(6)
On or about July 14, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 96 counterfeit “Altera” integrated circuits, valued
at $10,608.00, from Shenzhen, China.
(7)
On or about July 30, 2008, MVP Micro, Inc., 17332 Von Karman Ave., [no suite
number] Irvine, California 92614, imported 2,880 counterfeit “Atmel” integrated
circuits, valued at $4,320.00, from Shenzhen, China.
(8)
On or about July 31, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 752 counterfeit “Intel” integrated circuits, valued
at $4,474.00, from Shenzhen, China.
(9)
On or about August 1, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 100 counterfeit “Elantec” integrated circuits,
valued at $605.00, from Shenzhen, China.
(10)
On or about August 6, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 150 counterfeit “Altera” integrated circuits, valued
at $31,599.00, from Shenzhen, China. The parts were marked as military grade.
(11)
On or about August 6, 2008, RH Distributors, 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 80 counterfeit “Altera” integrated circuits, valued
at $16,800.00, from Shenzhen, China.
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(12)
On or about August 8, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 600 counterfeit “TDK” integrated circuits, valued
at $2,478.00, from Shenzhen, China. The parts were marked as military grade.
(13)
On or about August 29, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 13 counterfeit “Altera” integrated circuits, valued
at $26,601.00, from Shenzhen, China.
(14)
On or about September 3, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite
110, Irvine, California 92614, imported 1,728 counterfeit “Atmel” integrated circuits,
valued at $2,592.00, from Shenzhen, China.
(15)
On or about October 23, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 300 counterfeit “National Semi” integrated circuits,
valued at $2,130.00, from Shenzhen, China.
(16)
On or about October 23, 2008, MVP Micro, Inc., 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 1000 counterfeit “National Semi” integrated
circuits, valued at $7,100.00, from Shenzhen, China.
(17)
On or about November 10, 2008, MVP Micro, Inc., 17332 Von Karman Ave.,
Suite 110, Irvine, California 92614, imported 1000 counterfeit “Intel” integrated
circuits, valued at $6,900.00, from Chaonon Shantou, China.
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(18)
On or about December 18, 2008, Red Hat Distributors, 17332 Von Karman Ave.,
Suite 110, Irvine, California 92614, imported 500 counterfeit “VIA” integrated
circuits, valued at $4,250.00, from Shenzen, China.
(19)
On or about December 19, 2008, MVP Micro, 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 500 counterfeit “VIA” integrated circuits, valued
at $4,250.00, from Shenzen, China.
(20)
On or about December 19, 2008, RH Distributors, 17332 Von Karman Ave., Suite
110, Irvine, California 92614, imported 210 counterfeit “VIA” integrated circuits,
valued at $1,785.00, from Shenzen, China.
(21)
On or about January 2, 2009, RH Distributors, 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 315 counterfeit “VIA” integrated circuits, valued
at $2,677.50, from Hong Kong.
(22)
On or about March 25, 2009, RH Distributors, 17332 Von Karman Ave., Suite 110,
Irvine, California 92614, imported 100 counterfeit “VIA” integrated circuits, valued
at $885.00, from Shenzhen, China.
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Sale of Integrated Circuits Bearing Counterfeit Marks to Mid-West Manufacturer
K.
During March 2008, the defendants MUSTAFA ABDUL ALJAFF, MARWAH
FELAHY, and NEIL FELAHY, and others known and unknown, sold 14,000
counterfeit integrated circuits bearing the STMicroelectronics trademark, to a company
located in the Mid-West United States that manufacturers residential vacuum cleaners.
L.
During March 2008, the defendants MUSTAFA ABDUL ALJAFF, MARWAH
FELAHY, and NEIL FELAHY, and others known and unknown, transported in
international commerce from the State of California, United States of America to Hong
Kong, the 14,000 counterfeit “STMicroelectronics” integrated circuits, referenced in
“K,” above.
Sales of Counterfeit Integrated Circuits to the U.S. Military
M.
First Undercover Navy Contract with MVP Micro
(1)
On or about March 9, 2009, the defendants MUSTAFA ABDUL ALJAFF,
MARWAH FELAHY, and NEIL FELAHY, and others known and unknown,
conducting business as “MVP Micro, Inc.” transported in interstate commerce, via
UPS, from the State of California to Naval Sea Systems Command, Washington Navy
Yard, Washington, D.C., integrated circuits, bearing counterfeit marks, that is the
purported trademarks of Texas Instruments.
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(2)
On or about March 9, 2009, the defendants MUSTAFA ABDUL ALJAFF,
MARWAH FELAHY, and NEIL FELAHY, and others known and unknown,
conducting business as “MVP Micro,” transported in interstate commerce, via UPS,
from the State of California to Naval Sea Systems Command, Washington Navy Yard,
Washington, D.C., a Certificate of Conformance dated March 9, 2009, pertaining to
the integrated circuits shipped on March 9, 2009, stating:
“It is hereby certified that all materials shipped on our purchase order conform to the
applicable military and/or commercial specifications.”
N.
Second Undercover Navy Contract with MVP Micro
(1)
On or about June 10, 2009, “L.D.” on behalf of RH Distributors, sent an e-mail to a
U.S. Navy Contracting Officer stating:
“I am not buying these parts from a reseller. My suppliers are actual contract mfr’s
who have the parts I quoted you as excess inventory, I.E [sic.] - parts that were left
over after their production ended. The quantity quoted is the minimum they will sell.”
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(2)
On or about June 29, 2009, “B.M.” on behalf of MVP Micro, sent an e-mail to a U.S.
Navy Contracting Officer stating:
“... Question for you. There are several MFRS for these parts, do they have to be
exactly the same MFR? Part number should be the focus as the mfr is always changing
as companies are being bought and sold.”
(3)
On or about July 14, 2009, the defendants MUSTAFA ABDUL ALJAFF,
MARWAH FELAHY, and NEIL FELAHY, and others known and unknown,
conducting business as “MVP Micro, Inc.” transported in interstate commerce, via
UPS, from the State of California to the Naval Sea Systems Command, Washington
Navy Yard, Washington, D.C., integrated circuits, bearing counterfeit marks, that is
the purported trademarks of National Semiconductor, Analog Devices, and Texas
Instruments.
(4)
On or about July 14, 2009, the defendants MUSTAFA ABDUL ALJAFF,
MARWAH FELAHY, and NEIL FELAHY, and others known and unknown,
conducting business as “MVP Micro,” transported in interstate commerce, via UPS,
from the State of California to Naval Sea Systems Command, Washington Navy Yard,
Washington, D.C., multiple Certificates of Conformance dated July 9, 2009,
pertaining to the integrated circuits shipped on July 14, 2009, stating that, “It is hereby
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certified that all materials shipped on our purchase order conform to the applicable
military and/or commercial specifications.”
O.
Undercover Navy Contract with Pentagon Components
On or about July 28, 2009, the defendants MUSTAFA ABDUL ALJAFF,
MARWAH FELAHY, and NEIL FELAHY, and others known and unknown,
conducting business as “Pentagon Components, Inc.” transported in interstate
commerce, via FedEx, from the State of California to Naval Sea Systems Command,
Washington Navy Yard, Washington, D.C., integrated circuits, bearing counterfeit
marks, that is the purported trademarks of Analog Devices.
(Conspiracy, Aiding and Abetting, Causing an Act to be Done, in violation of Title 18, United
States Code, Sections 371, 2).
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Case 1:09-cr-00208-EGS Document 3 Filed 08/21/09 Page 25 of 38
COUNTS TWO THROUGH EIGHT - TRAFFICKING IN COUNTERFEIT GOODS
COUNT TWO
1.
The allegations set forth in paragraphs 1 through 22 and paragraphs 24 through 26
in Count One of this Indictment are hereby re-alleged and incorporated as if fully set forth herein.
2.
On or about March 12, 2009, in the District of Columbia and elsewhere, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, did intentionally traffic and attempt to
traffic in goods, that is integrated circuits marked part number OPA627AU, while knowingly
using on and in connection with such goods a counterfeit mark, to wit, a spurious mark identical
to and substantially indistinguishable from a registered trademark of Texas Instruments
Corporation, registration number 3445038, which includes the word mark,“BB,” a mark that has
been in use since 1959, and is registered for those goods on the principal register of the United
States Patent and Trademark Office, the use of which counterfeit mark was likely to cause
confusion, to cause mistake, and to deceive.
(Trafficking in Counterfeit Goods or Services, Aiding and Abetting, Causing an Act to be
Done, in violation of Title 18, United States Code, Sections 2320(a), 2).
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COUNT THREE
1.
The allegations set forth in paragraphs 1 through 22 and paragraphs 24 through 26
in Count One of this Indictment are hereby re-alleged and incorporated as if fully set forth herein.
2.
On or about July 22, 2009, in the District of Columbia and elsewhere, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, did intentionally traffic and attempt to
traffic in goods, that is integrated circuits marked part number AD5962-8871902MXA, while
knowingly using on and in connection with such goods a counterfeit mark, to wit, a spurious mark
identical to and substantially indistinguishable from a registered trademark of Analog Devices
Corporation, registration number 1717784, which includes the mark drawing of a triangle inside a
rectangle, a mark that has been in use since 1991, and is registered for those goods on the
principal register of the United States Patent and Trademark Office, the use of which counterfeit
mark was likely to cause confusion, to cause mistake, and to deceive.
(Trafficking in Counterfeit Goods or Services, Aiding and Abetting, Causing an Act to be
Done, in violation of Title 18, United States Code, Sections 2320(a), 2).
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COUNT FOUR
1.
The allegations set forth in paragraphs 1 through 22 and paragraphs 24 through 26
in Count One of this Indictment are hereby re-alleged and incorporated as if fully set forth herein.
2.
On or about July 22, 2009, in the District of Columbia and elsewhere, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, did intentionally traffic and attempt to
traffic in goods, that is integrated circuits marked part number AD664TD-BIP/883B, while
knowingly using on and in connection with such goods a counterfeit mark, to wit, a spurious mark
identical to and substantially indistinguishable from a registered trademark of Analog Devices
Corporation, registration number 1717784, which includes the mark drawing of a triangle inside a
rectangle, a mark that has been in use since 1991, and is registered for those goods on the
principal register of the United States Patent and Trademark Office, the use of which counterfeit
mark was likely to cause confusion, to cause mistake, and to deceive.
(Trafficking in Counterfeit Goods or Services, Aiding and Abetting, Causing an Act to be
Done, in violation of Title 18, United States Code, Sections 2320(a), 2).
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COUNT FIVE
1.
The allegations set forth in paragraphs 1 through 22 and paragraphs 24 through 26
in Count One of this Indictment are hereby re-alleged and incorporated as if fully set forth herein.
2.
On or about July 22, 2009, in the District of Columbia and elsewhere, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, did intentionally traffic and attempt to
traffic in goods, that is integrated circuits marked part number 3656AG, while knowingly using on
and in connection with such goods a counterfeit mark, to wit, a spurious mark identical to and
substantially indistinguishable from a registered trademark of Texas Instruments Corporation,
registration number 3445038, which includes the word mark,“BB,” a mark that has been in use
since 1959, and is registered for those goods on the principal register of the United States Patent
and Trademark Office, the use of which counterfeit mark was likely to cause confusion, to cause
mistake, and to deceive.
(Trafficking in Counterfeit Goods or Services, Aiding and Abetting, Causing an Act to be
Done, in violation of Title 18, United States Code, Sections 2320(a), 2).
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COUNT SIX
1.
The allegations set forth in paragraphs 1 through 22 and paragraphs 24 through 26
in Count One of this Indictment are hereby re-alleged and incorporated as if fully set forth herein.
2.
On or about July 22, 2009, in the District of Columbia and elsewhere, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, did intentionally traffic and attempt to
traffic in goods, that is integrated circuits marked part number SMJ34020AGBM40, a military
grade, critical application item, while knowingly using on and in connection with such goods a
counterfeit mark, to wit, a spurious mark identical to and substantially indistinguishable from a
registered trademark of Texas Instruments Corporation, registration number 2250065, which
includes the word mark “TI” inside a design of the map of Texas, a mark that has been in use
since 1996, and is registered for those goods on the principal register of the United States Patent
and Trademark Office, the use of which counterfeit mark was likely to cause confusion, to cause
mistake, and to deceive.
(Trafficking in Counterfeit Goods or Services, Aiding and Abetting, Causing an Act to be
Done, in violation of Title 18, United States Code, Sections 2320(a), 2).
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COUNT SEVEN
1.
The allegations set forth in paragraphs 1 through 22 and paragraphs 24 through 26
in Count One of this Indictment are hereby re-alleged and incorporated as if fully set forth herein.
2.
On or about July 28, 2009, in the District of Columbia and elsewhere, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, did intentionally traffic and attempt to
traffic in goods, that is integrated circuits marked part number AD5962-8871902MXA, while
knowingly using on and in connection with such goods a counterfeit mark, to wit, a spurious mark
identical to and substantially indistinguishable from a registered trademark of Analog Devices
Corporation, registration number 1717784, which includes the mark drawing of a triangle inside a
rectangle, a mark that has been in use since 1991, and registered for those goods on the principal
register of the United States Patent and Trademark Office, the use of which counterfeit mark was
likely to cause confusion, to cause mistake, and to deceive.
(Trafficking in Counterfeit Goods or Services, Aiding and Abetting, Causing an Act to be
Done, in violation of Title 18, United States Code, Sections 2320(a), 2).
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COUNT EIGHT
1.
The allegations set forth in paragraphs 1 through 22 and paragraphs 24 through 26
in Count One of this Indictment are hereby re-alleged and incorporated as if fully set forth herein.
2.
On or about July 28, 2009, in the District of Columbia and elsewhere, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, did intentionally traffic and attempt to
traffic in goods, that is integrated circuits marked part number AD664TD-BIP/883B, while
knowingly using on and in connection with such goods a counterfeit mark, to wit, a spurious mark
identical to and substantially indistinguishable from a registered trademark of Analog Devices
Corporation, registration number 1717784, which includes the mark drawing of a triangle inside a
rectangle, a mark that has been in use since 1991, and registered for those goods on the principal
register of the United States Patent and Trademark Office, the use of which counterfeit mark was
likely to cause confusion, to cause mistake, and to deceive.
(Trafficking in Counterfeit Goods or Services, Aiding and Abetting, Causing an Act to be
Done, in violation of Title 18, United States Code, Sections 2320(a), 2).
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COUNTS NINE THROUGH ELEVEN - MAIL FRAUD
COUNT NINE
1.
The allegations set forth in paragraphs 1 through 22 and paragraphs 24 through 26
in Count One of this Indictment are hereby re-alleged and incorporated as if fully set forth herein.
2.
Beginning on or about February 25, 2009, in the District of Columbia and
elsewhere, the defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL
FELAHY, and other individuals whose identities are known and unknown, knowingly and
wilfully devised and intended to devise a scheme and artifice to defraud the United States, and an
agency thereof, that is the Department of the Navy (“United States Navy”) by obtaining money
and property from the United States Navy by means of false and fraudulent pretenses,
representations, and promises, as set forth, in sum and substance, below.
The Scheme and Artifice to Defraud
3.
It was the object of the scheme and artifice to defraud for the defendants
MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and other
individuals whose identities are known and unknown, to enrich the businesses they controlled and
to enrich themselves by selling integrated circuits to the United States Navy, knowing that these
parts did not meet contractual requirements and had not been tested in accordance with
contractual requirements.
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4.
It was part of the scheme and artifice to defraud that beginning on or about
February 25, 2009, the defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and
NEIL FELAHY, and their employees whose identities are known and unknown, responded to the
United States Navy for a request for a quote and negotiated a contract price.
5.
It was part of the scheme and artifice to defraud that, in fulfilling the contract, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, falsely represented that the parts they
were selling met all contractual obligations. In fact, the defendants MUSTAFA ABDUL
ALJAFF, MARWAH FELAHY, and NEIL FELAHY, knew that the parts they were selling did
not meet all contractual obligations and had not been tested in accordance with the contract.
6.
On or about March 9, 2009, in the District of Columbia and elsewhere, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, for the purpose of executing , and
attempting to execute, the scheme and artifice, did knowingly cause a package containing
integrated circuits bearing counterfeit marks purportedly of Texas Instruments, Incorporated and a
fraudulent Certificate of Conformance to be delivered by a private or commercial interstate
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carrier, that is UPS, according to the direction thereon, addressed to NAVAIR Prototype N00024
Office, Washington Navy Yard, D.C. 20376 from MVP Micro, 17332 Von Karman Ave., Suite
110, Irvine, CA 92614.
(Mail Fraud, Aiding and Abetting, Causing an Act to be Done, in violation of Title 18, United
States Code, Sections 1341, 2).
COUNT TEN
1.
The allegations set forth in paragraphs 1 through 22 and paragraphs 24 through 26
in Count One of this Indictment are hereby re-alleged and incorporated as if fully set forth herein.
2.
Beginning on or about June 2, 2009, in the District of Columbia and elsewhere, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, knowingly and wilfully devised and
intended to devise a scheme and artifice to defraud the United States, and an agency thereof, that
is the Department of the Navy (“United States Navy”) by obtaining money and property from the
United States Navy by means of false and fraudulent pretenses, representations, and promises, as
set forth, in sum and substance, below.
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The Scheme and Artifice to Defraud
3.
It was the object of the scheme and artifice to defraud for the defendants
MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and other
individuals whose identities are known and unknown, to enrich the businesses they controlled and
to enrich themselves by selling integrated circuits to the United States Navy, knowing that these
parts did not meet contractual requirements and had not been tested in accordance with
contractual requirements.
4.
It was part of the scheme and artifice to defraud that beginning on or about June 2,
2009, the defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL
FELAHY, and their employees whose identities are known and unknown, responded to the
United States Navy for a request for a quote and negotiated a contract price.
5.
It was part of the scheme and artifice to defraud that, in fulfilling the contract, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, falsely represented that the parts they
were selling met all contractual obligations. In fact, the defendants MUSTAFA ABDUL
ALJAFF, MARWAH FELAHY, and NEIL FELAHY, knew that the parts they were selling did
not meet all contractual obligations and had not been tested in accordance with the contract.
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6.
On or about July 14, 2009, in the District of Columbia and elsewhere, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, for the purpose of executing, and
attempting to execute, the scheme and artifice, did knowingly cause a package containing
integrated circuits bearing counterfeit marks purportedly of National Semiconductor,
Incorporated, Analog Devices, Incorporated, and Texas Instruments, Incorporated, and fraudulent
Certificates of Conformance, to be delivered by a private or commercial interstate carrier, that is
UPS, according to the direction thereon, addressed to Commander, Naval Sea Systems Command
PEO Ships, Washington Navy Yard, D.C. 20376 from MVP Micro, 17332 Von Karman Ave.,
Suite 110, Irvine, CA 92614.
(Mail Fraud, Aiding and Abetting, Causing an Act to be Done, in violation of Title 18, United
States Code, Sections 1341, 2).
COUNT ELEVEN
1.
The allegations set forth in paragraphs 1 through 22 and paragraphs 24 through 26
in Count One of this Indictment are hereby re-alleged and incorporated as if fully set forth herein.
2.
Beginning on or about July 13, 2009, in the District of Columbia and elsewhere,
the defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY,
and other individuals whose identities are known and unknown, knowingly and wilfully devised
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and intended to devise a scheme and artifice to defraud the United States, and an agency thereof,
that is the Department of the Navy (“United States Navy”) by obtaining money and property from
the United States Navy by means of false and fraudulent pretenses, representations, and promises,
as set forth, in sum and substance, below.
The Scheme and Artifice to Defraud
3.
It was the object of the scheme and artifice to defraud for the defendants
MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and other
individuals whose identities are known and unknown, to enrich the businesses they controlled and
to enrich themselves by selling integrated circuits to the United States Navy, knowing that these
parts did not meet contractual requirements and had not been tested in accordance with
contractual requirements.
4.
It was part of the scheme and artifice to defraud that beginning on or about July 13,
2009, the defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL
FELAHY, and their employees whose identities are known and unknown, responded to the
United States Navy for a request for a quote and negotiated a contract price.
5.
It was part of the scheme and artifice to defraud that, in fulfilling the contract, the
defendants MUSTAFA ABDUL ALJAFF, MARWAH FELAHY, and NEIL FELAHY, and
other individuals whose identities are known and unknown, falsely represented that the parts they
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